Chicago, Illinois
August 15, 2003

Fitch Ratings has affirmed Monsanto Company's (Monsanto) 'A-' senior unsecured debt rating, 'A-' bank loan rating and 'F2' commercial paper rating. The ratings apply to approximately $1.44 billion of outstanding debt. The Rating Outlook is Stable.

Monsanto's ratings account for potential liabilities that may be assumed by the company in the event that Solutia Inc. (Solutia) is unable to meet their obligations. The liabilities include a portion of Solutia's other post-retirement employee benefits (OPEBs), underfunded by $744 million at the end of 2002, environmental remediation costs, estimated at $30-$40 million annually, and the legacy polychlorinated biphenyl (PCB) litigation, concentrated in three main cases with the final settlement amount yet to be determined. Fitch anticipates the credit profile to remain consistent to the current rating category in the intermediate term. However, Fitch will consider the company's ability to manage the cascading liabilities in the event of restructuring of Solutia, with particular emphasis on PCB litigation as more certainty is determined regarding the timing and amount of the final settlement of the two primary cases.

The PCB contamination litigation is currently the responsibility of Solutia due to the 1997 distribution agreement between Solutia and what is now Pharmacia. Through an amendment to the agreement, made as part of the August 2002 spinout of Monsanto from Pharmacia, Monsanto indemnifies Pharmacia from these legacy liabilities. PCB contamination damage awards in Anniston, AL are presently being considered in the Abernathy class action case (with current focus on property damage, cleanup and mental anguish). The Tolbert case will start in October. Fitch anticipates an appeal of the final judgments, further lengthening the litigation process. An agreement between Monsanto, Solutia and Pharmacia, states that Pharmacia will post a bond to stay the execution of any judgment in the Abernathy case if Solutia does not, however, no such commitment exists for the Tolbert case.

The ratings also reflect Monsanto's strong liquidity and cash flow generation, commitment to reduction of reliance on commercial paper borrowings, debt reduction, and high brand recognition and loyalty. Adherence to Monsanto's conservative financial policy resulted in the generation of free cash flow much greater than forecasted in 2002. The company projects free cash flow at the end of 2003 to be in the range of $350-$400 million, and at the end of the second quarter free cash flow generation was ahead of the pace set in 2002. The company continues to make positive steps in controlling the seasonal effects on total debt, due to a fluctuating receivables balance, through third-party funding mechanisms for its customers, a larger cash balance, and a shift of the capital structure to long-term obligations and away from commercial paper borrowings. At the end of the second quarter, Monsanto had no commercial paper outstanding. Leverage as measured by total debt-to-EBITDA was 1.3 times (x) and interest coverage as measured by EBITDA-to-interest incurred was approximately 15.3x for the last 12 months at June 30, 2003.

Fitch continues to monitor the progress of shifting the majority of gross profit contribution from the Roundup/glyphosate franchise to the seeds and genomics business, expected to occur in the 2003/2004 timeframe Monsanto continues to see declines in the Roundup/glyphosate franchise revenues and profitability due to increasing competition from generic glyphosate manufacturers, but is managing market share erosion through new product formulations, a high level of brand name recognition and loyalty, and an extensive bulk glyphosate distribution network. The Roundup family of products contributed greater than 39% of total 2002 revenues.

Monsanto is a provider of herbicides, conventional and hybrid seeds, and genetically modified seeds and traits to the agricultural industry. The company holds leading positions in the glyphosate herbicide market and in seeds and biotechnology traits.